As mortgage rates near 7%, many potential homebuyers are waiting until it makes more sense financially to buy. But purchasing a house involves more than interest rates and home prices.
Mortgage rates and prices tend to fluctuate cyclically, but your financial situation remains under your control. Read on to understand why waiting for lower mortgage rates might not be wise.
1. You’ll Pay More
Mortgage rates may be higher than historical lows, but that should not deter prospective homebuyers from entering the market. There are plenty of things within your control that can help qualify you for better rates in future such as building credit and saving for a larger down payment.
However, waiting for mortgage rates to significantly drop may put you at a competitive disadvantage because many current homeowners who are rate-locked will have an edge in the market. Even if mortgage rates were to dip back down into 3% or 4% territory it likely won’t last very long before moving upward again.
Waiting for lower mortgage rates to drop will not only be unrealistic but could cost more in the long run. By purchasing now rather than waiting, buying now could save thousands in interest payments and closing costs over time. So begin searching and get preapproved today for your home loan!
2. You’ll Be Stuck
Mortgage rates may be higher today than they were last year, but that shouldn’t dissuade new homebuyers from entering the market. No one can predict what mortgage rates will do in the future, and waiting could mean you miss out on savings opportunities as well as reaping all the rewards of homeownership.
Although mortgage rates have seen some increases since their low points in 2020 and 2021, they remain extremely affordable when measured against historical standards. Furthermore, if you buy your dream home before rates increase too drastically, refinancing may offer even lower rates later. It would be unwise to wait around for lower mortgage rates; even if they drop significantly further it could still take decades before rates fall below 3% again!
3. You’ll Be Out of Luck
Many prospective homeowners are currently wary of entering the housing market due to high mortgage rates. It’s understandable why they would hesitate, given that home loan rates have doubled since 2020 and may keep rising further. But waiting until rates come down is not always best as then you will face competition with upsizing/downsizing homeowners that had put off buying due to these high mortgage rates – when this time finally arrives you may end up competing against many more who had also put their purchase off waiting for better offers!
Mortgage rates cannot be predicted with absolute accuracy in the future; however, they’re expected to increase. Therefore, it is wise to prepare yourself for homeownership now while rates remain low so you can start reaping its benefits and saving money as they rise again – this means boosting your credit score and saving for a down payment.
4. You’ll Be Scammed
Home buying is one of the biggest financial decisions you will ever make, whether as a first-time buyer or experienced homeowner. That’s why it’s essential to prepare your personal finances and prepare your personal credit before making such a large purchase – such as working on your credit score and saving for down payments. Waiting until mortgage rates drop before buying may cost more money; since nobody knows exactly where mortgage rates will head in the future and missing an amazing opportunity may cost even more if you wait too long; for most people it makes more sense to buy while rates remain low if possible.